New Research Shows Value of Subsidized Employment Programs to Employers, Employees

On May 21, CLASP and the National Transitional Jobs Network (NTJN) hosted a webinar featuring Mark Elliott and Anne Roder of Mobility, presenting on new research they have conducted on the value of subsidized employment programs. This research, funded by the Rockefeller Foundation, looked at the employment experiences of participants in five subsidized employment programs operated in 2009 and 2010 under the federal TANF Emergency Fund, which provided additional funding as part of the American Recovery and Reinvestment Act (also known as the “stimulus act”). The Mobility research also included a survey of employers who participated in follow-up programs in four sites. Stan McMorris, the Deputy Executive Director for the Mississippi Department of Employment Security, commented on the findings and on his agency’s experience in operating Mississippi STEPS, one of the programs featured in the report.

Mobility found that workers in the subsidized employment programs experienced increased employment and earnings, even after the subsidized jobs ended. This was true both for programs where the workers were hired directly by the employers, and for ones where workers were placed on the payroll of a third-party intermediary. Long-term unemployed workers benefited particularly.

Some of the most exciting findings came from the Florida program, where the researchers were able to compare the outcomes of workers who participated in Florida Back to Work and workers who applied, but were not placed in jobs (the comparison group), either because the program ended, because they found an unsubsidized job, or because the available positions did not meet their skills and interests. Elliott and Roder found that the comparison group was very similar to the participating group before the placement, but the group that participated in Florida Back to Work had better post –program outcomes.

For-profit firms were more likely to retain workers after the subsidy ended and were more willing to participate in programs with only a partial subsidy. Nonprofits were more motivated by assisting participants and may be more willing to take on workers with less education and work experience to help them gain experience.